-5- 



m 



\ 



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canned fl-ult exports. With the possible exception of Sweden, these countries during ' 



the next few years will probably have considerable difficulty In paying for Imports 



from the U.S., even with special credit eorangements . { 



■ - • ■ 1 



Milk and dairy prosT)ects . Milk production In 191^6 will probably reach at 1 



least the estimated demand of 118,000,000,000 pounds but Is expected to be shdrt of ; 



the record high production total of 123,000,000,000 pounds set In 19U5, accorlng to J 



the -Department of Agriculture. ] 



I ;■} 



^ About half as much milk Is expected to be exported In the coming year as was J 

 shipped overseas this year. Export milk will be In the form of cheese, evaporated ; 

 milk and milk powders and will probably reach 2,500,000,000 to 5,000,000,000 pounds. 



If the price celling removal taiiee place In 19^6, prices on butter, fluid > 

 milk and butter fat are expected to be materially hl^er than this year. If price 

 control continues at present levels, farmers* prices for whole milk will probably 

 decline . 



Despite recent Depeurtment of Agriculture indications of early removal of 

 payments to dairy farmers, there seemed little likelihood today that these subsidies 

 could be legally removed at this time. They apparently will remain in force until 

 March or until funds are exhausted. 



» 



An increase in butter ceilings to stimulate production was also discounted. 

 It is known that the secretary of agriculture is opposed to ceilings on butterfat to 

 make the production of butter more attractive to producers. 



gffg situation . The 19^6 federal egg support program has been disclosed by 

 %h© Ccmmodlty Credit Corporation to interested parties. It is based on a national 

 avera^ of 29 cents a dozen for the first six months, and is expected to cost in the 

 neighbM'hood of $250,000,000. Official announcement is expected dally. The program 

 calls for government purchases of dried and ffozen eggs in carload lots, if necessary. 



*" ■ 



In establishing -a figure #ca?gj^port purchases, the government arrived at 

 29 cents a dozen because this reflects 9P -percentjjf parity as of November 1. The av- 

 erage price scheduled for the middle western e^ area will be 27 cents a dozen, it was 

 learned. The govemznent will buy shell eggs on a basis of wholesale and procurement i 

 grades. No eggs will be bought direct from the producers. Purchases will be made in * 

 carload lots at as near farm price levels as possible. 



Processing for export chaimes . A gradual change in direction toward less ^ 

 processing for export will characterize the shift frcm Army procurement and lend-lease 

 to commercial and UNPRA exports. The greater part of specialized wartime food process- 

 ing relates to fruits and vegetables; this is not the type of food likely to figure in 

 UNBRA's program. Continued demand for dry skim and dry whole milks, and for everything 

 that can be obtained in the way of animal protein, such as canned milk and canned fish, 

 are important exceptions to the general trend, UNRRA may have to accept substitutions 

 for specific types of foods, when a tight situation prevails in the dcaestic market. 

 The need will exist in 19^ for about all the processed food this country can spare. ' i 

 Some countries are already able to buy, but the total volume of exports will depend 

 largely on how soon satisfactory financial arrangements cein be made. 



Reconversion problems of food processors . Reconversicai problems of our food 

 marketing system are not nearly so pressing as those facing heavy industry. For most 



